Volume 9 Issue 5 • May 21st, 2013

In This Issue ...


CCA trade update

Canadian Cattlemen's Association (CCA) representatives returned to Brussels in May to take part in the latest negotiations for a Canada-EU Comprehensive Economic and Trade Agreement (CETA). As the negotiations draw closer to a conclusion, the CCA has remained in close connection with the Government of Canada's chief negotiator and with Ministerial staff who are overseeing the negotiations from the political level. The contact enables the CCA to ensure that the Canadian side is remaining firm on achieving meaningful access for Canadian beef. It also helps the CCA to cut through the various rumours and speculation floating around Ottawa circles and occasionally reported in the media. One such incident occurred recently when the EU ambassador to Canada made a comment about a particular level of beef access that the EU would be prepared to provide to Canada. From our perspective, the ambassador's comment is not particularly meaningful given that it was made absent any reference to the myriad of details that remain subject to be worked out. We have confirmed with the Canadian negotiators that the ambassador's comment was an independent initiative on his part not authorized by the EU Commission. As we get closer, we caution that any speculation or details leaked from unofficial sources must be treated as suspect and may not reflect reality inside the negotiations.

We are now days away from the World Trade Organization (WTO) deadline for the U.S. to bring Country of Origin Labeling (COOL) into compliance. There is zero possibility that the U.S. will be in compliance by May 23. The question is, will they be maintaining the current status quo level of non-compliance or will they make it worse by implementing U.S. Department of Agriculture (USDA) proposed regulatory amendment? The regulatory proposal moved a step closer to implementation on May 10 when USDA submitted it again to the White House Office of Management and Budget for approval to publish as a final rule. We note that the proposal is now designated as 'economically significant' meaning that the USDA now acknowledges the cost of this proposal will affect over $100 million of commerce. Such a designation should mean that the rule is subject to a more rigorous inter-agency review process and that there must be a mandatory 60 day delay following final publication before the rule can come into force. We will see whether USDA finds a way around these additional requirements or if the earliest the rule could come into force is late July. If the latter, then the U.S. would have no counter-argument to an assertion by Canada at the WTO that the U.S. has failed to comply by the deadline and Canada would be able to immediately request compensation or authority to retaliate.

On the U.S. legislative front, both the House and Senate agriculture committees passed their drafts of a new Farm Bill last week. This week, the expectation is that the full Senate will consider the Farm Bill while the House is expected to do so next week. In other words, a new U.S. Farm Bill now appears to be on a more expedited path than was thought only a few weeks ago. However, the CCA continues to believe that U.S. lawmakers will only be motivated to address COOL in this Farm Bill if they believe that retaliatory tariffs on U.S. exports are being considered by Canada and Mexico. As of this writing, International Trade Minister Ed Fast and Agriculture and Agri-Food Canada Minister Gerry Ritz were working toward having the Government of Canada publish a list of U.S. products that would be potential targets. CCA's expectation is that products made in areas represented by U.S. lawmakers opposing a resolution of the COOL dispute would find their way onto such a list.


Cattle producers take issues to Parliament Hill

Saskatchewan Cattlemen's Association (SCA) representatives Paula Larson, Larry Grant and Barb Larson were in Ottawa May 7 for the latest CCA Fly-In day. CCA Ottawa staff, Ryder Lee and John Masswohl, were on board to assist delivering messages.  

Issues discussed included encouraging MPs to support a retaliation strategy to resolve the U.S. Country of Origin Labelling (COOL) law, insisting on meaningful beef access in a trade agreement with the European Union, addressing labour shortages in the beef and cattle sector, implementing price and forage insurance programs for cattle producers and the PFRA pasture transition process.

The group informed MPs that COOL costs every cattle producer $25-$40 per head whether their animals are exported to the U.S. or sold domestically. Moreover, the USDA's proposed rule does not bring the U.S. into compliance with World Trade Organization (WTO) obligations, but rather will make the issue worse. Communicating potential retaliation targets is an imperative next step for Canada to motivate U.S. lawmakers to amend the COOL legislation to comply with the WTO. During the fly-in, we encouraged MPs to support getting a list of potential targets published as soon as possible so U.S. lawmakers can better understand that punitive measures could negatively impact their districts.

With negotiations ongoing in Brussels for a CETA, the group reminded MP's that the EU is a market of 500 million people and must import beef to meet its demand. The high value of the EU market can add to Canadian beef carcass values, and that is good for producers. Currently access is limited by quotas and tariffs and technical requirements. The group told MPs a free trade agreement with the EU that includes real and significant access for Canadian beef is something beef producers would strongly support. This means it must create sufficient access to encourage Canadian producers to produce cattle according to European standards and it must recognize the Canadian food safety system as equivalent to the EU. The ban on hormone implants and other growth promotants will remain but given enough access and the ability of Canadian packing plants to export to the EU without modifying their existing protocols could make the increased on farm costs worthwhile for many producers.  

Regarding the Temporary Foreign Worker (TFW) program, we told MPs that we are concerned the recent media storm may cause the Government to over-react and implement negative changes to this program that has a legitimate purpose for Canadian agriculture producers, particularly in the beef and cattle industry.

Although the TFW program has some flaws it has been a source of labour to cattle producers and meat packers desperately in need of full-time and permanent workers. Few Canadians are applying for or stay in these types of jobs. Cattle production contributes $6.49 billion at the farm gate and about $33 billion to the economy overall yet the growth of the industry is constrained by chronic labour shortfalls.  

The group asked MPs to improve the TFW program, voiced support for stopping abuse of the program and described the issues with the current program. The fact is the industry has chronic and permanent labour shortages that the TFW program, by design, cannot fix.

Government programs are affecting land use decisions. As crop insurance coverage rises along with grain prices, it can make grain production more attractive than cattle production on marginal lands.

The group suggest that perhaps with better forage insurance programs, decisions would not tilt so heavily in favour of grain production. The group reiterated the long-standing request to expand price insurance for cattle production beyond Alberta and to improve forage insurance offerings. These two changes would help to level the playing field and reduce the amount of influence government programs are having on land use decisions and competitiveness between sectors.

The PFRA pasture transition is proceeding. The group asked MPs for clarity around 'federal non-reversionary land', an unfamiliar term associated with some pastures so interested parties can created effective business plans to make the transition work.

As with the previous Fly-In days the schedule was filled with meetings with MPs and their staff. The group also met with Agriculture Minister Ritz's advisors. Alberta Beef Producers will be in Ottawa on June 4 for their fly-in day.

Fly-In days are one way for producers from provincial associations to advance national or federal issues of concern. These issues evolve over time. Some are completed and, frustratingly, some remain on the list for some time. Even old issues need discussing. MPs have told us many times: "thank you for bringing this up, if you don't tell us to work on these issues we will keep busy with other things."


BSE 10 years later

Canfax Market Briefs

Monday marked the 10-year anniversary of the first case of domestic bovine spongiform encephalopathy (BSE) in Canada. Although media interest in the 10-year anniversary was high, it was pretty much a non-event for anyone else. Industry long-ago turned the corner on BSE which reflects our confidence in the effectiveness of the control measures Canada has in place to eradicate the disease from the Canadian herd. The enhanced feed ban and testing programs are doing their job and Canada is now in the homestretch for the next two years in terms of being able to demonstrate to the World Organisation for Animal Health (OIE) that BSE is indeed eradicated from the Canadian herd. We still need to ensure our surveillance is at the appropriate level to measure the effectiveness of the controls. Canada is also a world leader in traceability which enables the Canadian Food Inspection Agency (CFIA) to swiftly trace back an animal to its herd of origin in the event of a livestock disease outbreak.

Market access has grown exponentially in the last decade, with new markets and expanded access announcements the new norm, thanks to the efforts of Ministers Ritz and Fast. Today, just two of the CCA's top 10 trade issues are BSE-related and they are primarily due to countries' ignoring the international science-based guidelines.

The current size of the Canadian herd and cattle markets are a function of recent conditions of extreme weather that have impacted on inputs like feed, and nothing to do with events of a decade ago.

About the only thing that is the same now as it was 10 years ago is continued consumer support for nutritious, high quality Canadian beef. The Canadian Cattlemen's Association (CCA) thanks consumers for that on behalf of the folks that run Canada's 68,500 beef farms and feedlots.


Taking a closer look at the 2011 Ag Census

While the Agriculture Census was taken in 2011, results were not published until 2012. Recently more detailed tables became available and this warranted taking a closer look at the 2011 Ag Census results.

Turns out the beef industry has nearly 5,000 more farms than originally thought. Of the 68,434 farms, 88 per cent are cow/calf operations, followed by 6 per cent each of stocker operations and finishing operations. These numbers exclude the 17,456 dairy operations in Canada.

From 2006 to 2011 the number of beef farms declined, regardless of size, except the number of farms with more than 528 beef cows which increased 0.5 per cent. The number of beef cows on these larger operations increased 6 per cent while beef cow inventories on all other sizes declined. The largest declines were seen in the 48-122 head herds, down 31 per cent in farm numbers and beef cow numbers. There are a lot of small operations in Canada. The majority of beef farms (63%) have herds with less than 47 head. While farms with more than 272 head comprise only 3 per cent of farm numbers, they hold 23 per cent of Canada's beef cows. The bulk of beef cows are in herds between 47 and 273 head.

Beef producers manage 79.9 million acres, or 50 per cent of Canada's 160 million acres of agricultural land. Of that, 60 per cent is owned, 20 per cent is leased from government, and 20 per cent is leased from others. Younger producers (<35 years) owned (48%), and leased from government (13%) fewer acres while leasing more from others (35%). Older producers (>55 years) had more owned land (69%).

Half of Canada's beef farms had gross farm receipts (GFR) under $50,000 in 2011. This means there are a lot of smaller operations who cannot make a living from beef cattle alone. This is the case even in the Prairie provinces where there are larger operations; 43 per cent of beef farms in Alberta and Manitoba have GFR under $50,000 and in Saskatchewan it was 34 per cent.

One-third of beef farms have employees, with 8,594 year round positions and 13,066 seasonal or temporary positions.


The CCA thanks its Prime Partners

The CCA recognizes and appreciates the continued support of the Canadian cattle industry by Prime Partners: Merck Animal Health, Scotiabank and Farm Credit Canada. To learn more about the CCA Partners Program, visit http://www.cattle.ca/cca-partners-program.


Latest research on e-beam irradiation of beef

Irradiation is approved for food treatment in over 50 countries. In Canada, irradiation is approved for spices, seasonings, flour, onions and potatoes. In the United States, irradiation is approved for use in meat at absorbed doses up to 7 kilo Gray (kGy), and it has been scientifically proven safe for food use at absorbed doses up to 60 kGy. Irradiation has insignificant effects on nutrients in beef, even at very high absorbed doses. A recently-completed research project, funded by the National Check-off and Canada's Beef Science Cluster, studied the effectiveness of low-dose electron-beam treatment (at 1 kGy) in eliminating harmful bacteria in beef trim used to make ground beef. It also studied whether a panel of taste-testers could determine whether or not patties were made with e-beam treated beef based on color, aroma, texture, juiciness or flavor.

The research found that low dose (1 kGy) e-beam treatment can effectively control E. coli O157:H7, non-O157 VTEC E. coli and Salmonella in fresh beef trim under normal processing conditions with no significant effect on any of the sensory attributes. Click here to learn more about this research and see an interview with the lead researcher of this study in the latest episode of the Beef Research School video series.


CCA Action News

Staff Contributors: John Masswohl, Ryder Lee, Brenna Grant, Tracy Sakatch
Written, edited and compiled by: Gina Teel and Matthew French

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The Canadian Cattlemen's Association is the national voice for Canada's beef cattle industry, representing 63,500 beef farms.

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